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TMI Blog2019 (10) TMI 514X X X X Extracts X X X X X X X X Extracts X X X X ..... ue. Where the electricity meter is in name of the owner and the electricity bills comes in the name of the owner, the assessee reimburses and the pays the same to the owner, we see no infirmity in the said claim of the assessee company and the same is directed to be allowed. In respect of premises situated at Flat No.703, Wonder Height, Alwar, the same has been taken on rent by the assessee company from the owner of the said premises and has been provided to Shri Nikunj Sanghi, the Director of the assessee company for his residential accommodation. The said Flat No. 703 is adjoining the other two flats namely Flat No. 701 702 and all these three flats have been claimed as converted into one residential accommodation for Shri Nikunj Sanghi, the Director of the assessee company. Apparently, Flat No. 701 702 are owned by Shri Nikunj Sanghi only and one electricity meter has been installed for the combined residential accommodation consisting of three flats. The electricity meter apparently is taken in the name of Shri Nikunj Sanghi, being the owner of the two flats and not in the name of the other owner namely, Nalini Goyal who is the owner of the other flat. Where the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t found fully supported by vouchers. Some of the expenses have been claimed on self made vouchers without any supporting bills/receipts. In the absence of proper vouchers, the expenses are not subject to complete' verification and as such cannot be allowed in toto. Personal use of the above facilities by the staff cannot be denied. Keeping in view of the facts and circumstances of the case and discussion with the A/R of the assessee company, the Assessing officer disallowed an amount of ₹ 8,54,320/- being 10% of the above expenses claimed and the same was added to the income of the assessee company. 4. On appeal, the ld CIT(A) held that assessee has failed to provide supporting documents to prove that such expenditure are incurred wholly and exclusively for the purpose of business or profession and some of the expenses have been incurred in cash also. Accordingly, he partly confirmed disallowance of ₹ 2 lacs and against the said findings, the assessee is in appeal before us. 5. During the course of hearing, the ld AR submitted that during the year assessee has claimed repair maintenance expenses of ₹ 62,04,409/-. Out of this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce in called for. 8. It was further submitted that the Ld. CIT(A) after considering the explanation of assessee has reduced the disallowance out of these expenses to ₹ 2 lacs without pointing out any specific expense which is not supported by documents. There is no restriction in the law for incurring expenditure in cash. Hence, such adhoc disallowance of ₹ 2 lacs is uncalled for. Reliance in this connection is placed on the following cases:- DCIT Vs. ABC Bearing Ltd. (2017) 157 DTR 242 (Mum.) (Trib.) ACIT Vs. Ganpati Enterprises Ltd. (2013) 142 ITD 118 (Delhi) (Trib.) CIT Vs. Oracle India (P) Ltd. 199 Taxman 181 (Del) (HC) Arthur Anderson Co. Vs. ACIT (2010- TIOL-416-ITAT) Seasons Catering Services (P) Ltd. Vs. DCIT 43 DTR 397 (Del) (Trib.) 9. The ld DR is heard who has relied on the order of the lower authorities and it was submitted that the ld CIT(A) has already reduced the disallowance to ₹ 2 lacs which may kindly be sustained. 10. We have heard the rival contentions and pursued the material av ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore it is clear that the company pays electricity bills of different persons and claim expenses. The details of Resolution and electricity bills are as under:- S. No. Address of House/Building Name on the electricity bills As the Resolution house allotted to Date of Resolution Matched or Not 1. 5/8, Kala Kua, Alwar Smt. Sumitra Devi Sanghi W/o Sh. Jaswant Singh Sh. Nikunj Sanghi 05.01.1989 Not 2. 501, Wonder Height, Alwar Smt. Susmita Sarraf W/o Sanjay Sarraf Sh. Sanjay Sarraf 10.05.2011 Matched 3. 701 702 Wonder Height, Alwar Sht. Niku ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y expenses incurred are wholly and exclusively for the purpose of business and hence, no disallowance is called for. 16. It was submitted by the ld AR that the electricity expenses in respect of Flat No.703, Wonder Height, Alwar is governed by the Board Resolution dt. 07.02.2014. The flat no.701, 702 703 of Wonder Heights are adjoining flats and have been converted into one complete house for ease of living and convenience by removing their common partition walls. Flat No.701 702 are owned by Sh. Nikunj Sanghi, Director of the assessee company and Flat No.703 is owned by Smt. Nalini Goyal, sister of Sh. Nikunj Sanghi. Since flat no. 703 is in ownership of Smt. Nalini Goyal, electricity bills are in her name. The assessee has provided the accommodation to Sh. Nikunj Sanghi for his residence and it has resolved to bear the electricity expenses in terms of Board Resolution dt. 07.02.2014. The AO has allowed the electricity expense of flat no. 701 702 by following the Board Resolution dt. 07.02.2014 but has not allowed the electricity expenses in respect of flat no. 703 which is also governed by the same board resolution. All the three flat numbers refer to one r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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